so , am I a speculator ?

Recent publicity seeks to blame speculators , in part , for property price rises .

According to one definition

Speculation is the practice of engaging in risky financial transactions in an attempt to profit from fluctuations in the market value of a tradable good such as a financial instrument, rather than attempting to profit from the underlying financial attributes embodied in the instrument such as capital gains, interest, or dividends. Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements. Speculation can in principle involve any tradable good or financial instrument. Speculators are particularly common in the markets for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate, and derivatives.

I buy properties with the intent of selling some for capital gain and keeping others as long term rental properties and I time my transactions to take advantage of price fluctuations , which IMHO , are quite predictable and again , IMHO , are relatively risk free . Compared to many on the forum my LVR's and buffers are very conservative

Outsiders who are not familiar with the market may well consider what I do risky , but I don't . I'm generally buying before significant prices and often when a market is flat , as is Launceston at the moment , so I'm not forcing FHB's out of the market and last year in Goodna , they were conspicuous by their absence

So , am I a speculator ?

Cliff

 

good point @See Change, are you?

 

While the uneducated would hands down say that yes, you are a speculator, the reality is that no, you are not. As per the bolded section above, you gain from the CAPITAL GAINS of a property. You make an educated guess as to where the properties are undervalued....and buy accordingly, which is vastly different from someone who just buys something in a hurry, so they don't miss out.

 

Yes you are.

This is the speculating bit:

So is this:

You are also an investor:

"keeping others as long term rental properties"

These people are typically hedgers (hedging against rising cost of rent/property):

"FHB's"

Speculators aren't bad & clearly you're happy with your level of risk, they are one of the main types of player in financial markets. I wouldn't stress to much about it as long as you're comfortable doing it.

 

No easy answer. I dont think it can be yes or no - black or white answer.
Going by the definition and intent of the definition above ( which i would agree with) and your post, id say you are mostly not a speculator. There are too many subjective variable at play- risk, etc to be a definite...however, it can be argued that a lot of these are quantified by the market and thus cannot be seen as subjective ( eg insurance companies price risk)

I would say as long as appropriate consideration ( dd etc) is given to underlying fundamentals and held generally for longer terms this is not speculating, rather a more considered investment over a longer period of time.
Some would say this is the difference between speculating vs investing.

Timing the market is not necessarily speculating ewither...as long as appropriate consideration is given to underlying fundamentals and longer held, i dont think it can really be called speculating- but again its varying degrees.

 

We want the masses to think its all pure speculative, high risk, hocus pocus. That's what keeps them out, and us in to grab opportunities.


Its all good.

 

@See Change - you're a speculative investor, not a mug punter nor one of the pack.

A business model which requires research (not just a few articles by Corolyn Cummins), research areas of interest, buy & hold lowers risk compared to someone following the pack.

 

not stressing about it . Purely curious

Cliff

 

I like you are a Specufester......we all are on this site...,it just some maybe more successful than others as there are different levels of skill.

 

Perhaps. And if you are..it seems like it's working for you and others here. So, keep at it.

 

Would you care if you were?

But really, Speculation is the practice of engaging in risky financial transactions. I question that what you are doing is that risky. Compare to a day trader. I classify what you are doing as low risk.

 

Exactly

I have been called a speculator on this forum and SS many times, could not care less.

What matters most is if you have been following a model that works, makes money then it means you are doing something right, if on the other hand you are losing money then perhaps its time to review the strategy.

MTR

 

But this is your belief??? Perhaps some investors see these areas as high risk? Some investors wont buy in regional towns etc Some people believe developing is very high risk?? etc etc.

The proof in the pudding is the track record of the investor just my opinion, if they keep making money then I can only assume they know what they are doing.

Whatever you do - stay away from gurus they have a track record of getting it wrong

 

From Dr Google

speculation
ˌspɛkjʊˈleɪʃn/Submit
noun
noun: speculation; plural noun: speculations
1.
the forming of a theory or conjecture without firm evidence.
"there has been widespread speculation that he plans to quit"
synonyms: conjecture, theorizing, hypothesizing, supposition, guesswork; talk; theory, hypothesis, thesis, postulation, guess, surmise, opinion, notion; prediction, forecast; informalguesstimate
"his resignation fuelled speculation of an imminent cabinet reshuffle"
gamble, venture, risk;
gambling;
investment;
informalspec;
informalflutter;
archaicadventure
"a speculation on the stock market"
2.
investment in stocks, property, etc. in the hope of gain but with the risk of loss.
"the company's move into property speculation"

So - am I forming a theory? Yes
Is my evidence firm? THIS is the key
Do I have hope of Gain? Yes
Do I have risk of loss? Yes

Obviously it is all semantics and definitions but on these grounds it would appear that it hinges on whether you have "firm evidence" for your hope of gain. If the definition of speculation is that it be without firm evidence, then its gambling. If the definition allows for evidence then it broadens to include virtually all investing. This is because all investing involves forming a theory, hoping for gain and risking loss. How good we get at this (whatever its called) depends on how firm our evidence is and how well with mitigate and respond to those risks.

 

Whether you're a speculator, spectator or speculum, it don't matter.
You all just want to have a look at what's going on.

 

I'd vote "yes" - you are a speculator, especially if you negative gear.

The leverage involved makes it risky and the continued capital growth is unknown and can be impacted by a lot of uncontrollable factors.

 

How long is a piece of string

what if investors purchased properties in Sydney and Melbourne market during 2012-2014, both rising markets and they purchased because Herron Todd reported the evidence of sales/volume etc. is this speculative??

 

I don't care what people call me - as long as I'm building wealth and ticking off the short term goals and moving towards my long term beauties.

Name call away.